Smallholder agriculture is an important economic activity and source of employment in Sub-Saharan Africa. Over 50% of the Sub-Saharan African population is employed in agriculture, and the majority of these are smallholder farmers. Enabling the inclusion of smallholders in larger business value chains, through for instance outgrower schemes, can facilitate numerous benefits, including higher incomes and food security.
Ensuring food security and stable incomes for subsistence farmers is also a key priority in Norway’s foreign and development policy, as laid out in the 2019-23 action plan for sustainable food systems.
In Norfund’s Agri and Manufacturing portfolio, the number of associated farmers has increased substantially in recent years, with over 35 000 in 2021. This increase has largely been driven by a strategic shift in the department’s focus, from primary agriculture to investing in the value chain. This growth is therefore expected to persist in the coming years.
Partnerships
Smallholder farmers have therefore become a focus area for Business Support, where we see numerous opportunities to drive value through strengthening capabilities and relationships, as well as promoting women’s inclusion and climate adaptation. It is, however, important for us to conduct this work together with experienced partners that have the relevant required expertise. 2021 was an important year in this regard, as we entered a partnership with TechnoServe under the UK government’s FCDO Commercial Agriculture for Smallholder and Agribusiness (CASA) Technical Assistance Facility (TAF) Through the TAF, CASA supports agribusinesses on the African continent that source from smallholder farmers and works alongside investors and companies to strengthen upstream supply chains and promote returns, development impact and resilience.
Active projects
Business Support has conducted several interventions directed at smallholders and associated farmers in our portfolio companies. With Vertical Agro, for instance, Business Support facilitated the expansion of the company’s outgrower scheme and provided input supply, training, and certification for new contract farmers. With all our interventions we look for opportunities to integrate elements from the Business Support focus areas. For instance, we encourage incorporating a gender component, and as of 2021, 41% of all associated farmers in Norfund’s portfolio companies are female. Climate mitigation and adaptation is another key priority within our smallholder focus.